Ledger SAS, a Paris-based startup that manufactures crypto wallet hardware, cut 12% of its workforce on Thursday, according to a letter sent by its Chief Executive Pascal Gauthier.

Ledger produces hardware products and services that allow companies and consumers secure their blockchain-based cryptocurrencies and tokens. The company’s current devices work similarly to USB keys and feature small screens that permit users to confirm transactions and can act without exposing the private keys that represent their currency wallets.

According to LinkedIn, Ledger employs approximately 734 staff in total, meaning the company is cutting about 88 people.

“Macroeconomic headwinds are limiting our ability to generate revenue, and in response to the current market conditions and business realities, we must reduce roles across the global business,” Gauthier said.

The crypto markets suffered a massive downturn in 2022 known as “crypto winter” and the collapse and bankruptcy of the largest cryptocurrency exchange at the time, FTX Trading Ltd. The collapse led to the bankruptcy of other companies including broker Voyager Digital Ltd. and crypto lender BlockFi Lending LLC.

Gauthier said that at the time Ledger hoped that its business model would be sought out as useful by consumers, since maintaining currency in the custody of centralized exchanges and lenders would mean that when they went bankrupt, they would cut off access. By providing hardware wallets, users can maintain control of their assets.

“The events of the last year and a half have helped the market appreciate Ledger’s fundamentals: ‘If not self-custody, why crypto?’” said Gauthier.

In fact, Ledger raised a $109 million funding round at a $1.4 billion valuation in March that attracted new investors since the company’s already massive $380 million Series C funding round two years earlier in 2021.

However, the company has run into controversy. In 2020, it became the target of hackers who stole private customer data including email addresses, phone numbers and physical addresses.

Ledger hasn’t been the only blockchain firm to see workforce layoffs this month. Blockchain analysis provider Chainalysis Inc. cut 15% staff, or about 135 employees, on Oct. 3 following smaller round of layoffs earlier this year, citing the need to reduce expenses. Also joining the trend, blockchain platform Chia Network laid off a third of its staff, or 26 employees, Oct. 2 after losing major banking partner Credit Suisse.

Image: Ledger